Comcast stock falls after management warns broadband subscribers will drop by over 100,000 in Q4
Comcast (CMCSA) shares closed down nearly 10% Monday after Dave Watson, president and CEO of Comcast Cable, said the company expects the number of broadband subscribers to decline by more than 100,000 in the current quarter.
Wall Street had expected the number of broadband subscribers to decline by about 63,300, according to the latest consensus estimates compiled by Bloomberg.
“If you look at the first half of the year, we lost about 100,000 (broadband subscribers) — just under 100,000 per quarter in the first half of the year,” Watson said Monday at a UBS media conference in New York City.
“We move into the third quarter on the shoulders of the Olympic marketing boom, the return of students, seasonal dynamics trending well, and then… Competitor strike. All three saw performance improvements in the third quarter (but the fourth quarter) resembled the first half of the year more.
In the third quarter, Comcast shed 87,000 internet customers, with Watson describing the current broadband market as “highly competitive.”
Mobile providers like Verizon (VZ), T-Mobile (TMUS), and AT&T (T) have entered the space with more flexible offerings to attract lower-income consumers. These three companies saw subscriber gains in the third quarter.
Along with increased competition, two Southeast hurricanes earlier this fall likely exacerbated broadband losses by about 10,000 and contributed to a “minor impact” on average revenue per user (ARPU), Watson said.
He expects ARPU to remain “at the lower end” of a 3% to 4% range for the current quarter.
“So when you put all those things together and you look at the fourth quarter, we could be looking at a loss of broadband subscribers in the fourth quarter of just over 100,000,” he said. “So things stay very competitive, but consistent with previous parts of the year.”
Comcast’s broadband struggles come as the company also reported a decline of 365,000 TV consumers as more consumers cut the cable cord in favor of less expensive streaming services.
The company said last month that it would spin off its cable properties, with the exception of Bravo, after raising the possibility just a few weeks ago. At the time, the company said it wanted to “play an offensive role” in order to combat an industry burdened by increased cord cutting.
The separate company, currently called SpinCo, will include most of NBCUniversal’s cable television networks, including USA Network, CNBC, MSNBC, Oxygen, E!, SYFY and the Golf Channel.
Alexandra Canal He is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, linkedin, And email it to alexandra.canal@yahoofinance.com.
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